TALLAHASSEE, Fla. (May 29, 2013) – The R Street Institute today commended Florida Gov. Rick Scott for signing S.B. 1770, legislation that will implement key reforms to the state-run Citizens Property Insurance Corp.
Among its provisions, S.B. 1770 would lower maximum coverage Citizens can write from the current cap of $2 million to $1 million in 2014, before gradually lowering to $700,000 in 2017. The bill also will create a clearinghouse to verify the eligibility of policies coming in to Citizens, currently the largest property insurer in the state, with 1.3 million policies.
The bill also includes a provision, based on a proposal from R Street Florida Director Christian R. Cámara, that will bar Citizens from insuring new construction in areas seaward of the Coastal Construction Control Line. In his signing statement, Scott highlighted that provision for particular attention.
“This commonsense step eliminates public insurance subsidies for new coastal constructions with a high risk of storm losses,” Scott said. “This reform also has the added benefit of protecting environmentally sensitive areas from further development.”
Cámara said S.B. 1770 “combines fiscal responsibility and market-based environmental stewardship.” He commended Scott for signing the bill and thanked state Sen. David Simmons, R-Altamonte Springs, and state Rep. John Wood, R-Haines City, for shepherding it through the legislative process.
“By disallowing government-run Citizens to cover new construction in the state’s federally-protected wetlands, the State of Florida is following the bipartisan example set by President Reagan and the congressional Republicans and Democrats that enacted the Coastal Barrier Resources Act,” Cámara said. “Although more needs to be done to restore Florida’s property insurance market, Senate Bill 1770 is a small, balanced step toward reaching that goal.”
R Street’s environmental and free-market partners also weighed in to praise the bill’s signing:
“This legislation sensibly combines fiscal conservatism and sound coastal conservation policy in low-lying areas along our shores,” said Manley Fuller, president of the Florida Wildlife Federation.
“Gov. Scott made a great decision today to sign S.B. 1770 into law,” said Thomas Perrin, director of public affairs for the James Madison Institute. “By adding a policyholder clearinghouse and allowing mutual insurance companies to participate in the surplus lines program, Florida lawmakers have taken large step in the right direction to steadily reduce the size of Citizens and restore our property insurance market to pre-2007 health.”
“We applaud the governor for signing this legislation,” said Gary Appelson, policy coordinator for the Sea Turtle Conservancy. “This reduces state subsidies for new construction in the most high-risk coastal locations and is a much-needed step to implement fiscally responsible reforms to Citizens Property Insurance.”